Shifts in performance over typical retail peaks will have implications for major holidays in second half of the year
CHICAGO, July 18, 2023 – In June 2023, U.S. retail sales revenue, including both discretionary general merchandise and consumer packaged goods (CPG), increased 1% compared to the same month last year, and unit sales declined 3%. Contributing to these results were declines of 4% in dollar sales and 9% in unit sales of discretionary general merchandise compared to last June. Food and beverage CPG spending grew 5% over last year with a 2% unit-sales decline. Non-edible CPG sales revenue grew 2%, while unit sales declined 5%, according to Circana, formerly IRI and The NPD Group.
“A new sales performance baseline has been established in discretionary general merchandise with sustained decline levels through the second quarter of the year, and demand movement has started to develop in CPG,” said Marshal Cohen, chief retail industry advisor for Circana.
Discretionary general merchandise spending declines continued into the first week of July with another 3% year-over-year decline in sales revenue, and 7% drop in unit sales. These shifts in spending and demand relate to the ongoing trend toward flattening retail peaks that began in 2022. Year-to-date, retail sales during the traditional selling peaks of Valentine’s Day, Easter, Mother’s Day, and Father’s Day have failed to reach expected levels. Instances of similar shifts have occurred in CPG, but it remains to be seen if the same kinds of trends are forming amid enduring price elevation.
“Economic challenges have reinforced behavioral shifts that emerged from the pandemic, including consumers becoming more thoughtful about how and what they spend their money on, which ultimately affects when the spending takes place,” said Cohen, “Retailers and manufacturers need to recognize the shifts that are happening to the retail landscape and plan accordingly, particularly as we approach the major retail holidays, like the back-to-school season, Black Friday, and Christmas.”